International Paper cutting 1,600 U.S. jobs, closing Albany mill

MEMPHIS, Tenn.-- International Paper Co., the world's largest maker of cardboard box materials, said today it is cutting 1,600 positions -- including 270 in Oregon -- as it brings capacity into line with sharply diminished demand.

The global recession has slashed demand for paper and paperboard products and IP, which has been cutting capacity since 2008, said a recovery is not in sight.

"The company's demand is not expected to return to 2008 levels in the near future," the company said in a statement. "Therefore, permanent IP capacity closures are necessary."

The job cuts represent about 3 percent of the company's work force, currently about 57,000. Plants in Albany, Ore., Pineville, La., and Franklin, Va., will be shuttered, as will a currently idled mill in Valliant, Okla. Earlier this month, The Associated Press reported that the Albany mill employed about 270.

The moves, to be implemented from mid-December through Spring 2010, will cut IP's capacity, which has been about 16 million tons, by about 2.1 million tons or 13 percent.

"We have concluded that we have excess capacity in our North American paper and packaging businesses, and these decisions will better match our supply with our expected customer demand," CEO John Faraci said in a statement.

After the permanent shutdowns, IP will have about 10 million tons of North American containerboard capacity, 2.6 million tons of North American uncoated freesheet production capacity and 1.7 million tons of North American coated paperboard capacity.

Charges of about $1.16 billion for the closures will be booked in the fourth quarter and first quarter of next year. In addition, IP will incur additional closure costs.